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Making people want wallets

Consumer research we carried out recently amongst US consumers paints a worrying picture for putative mobile wallet issuers.

We asked 1015 US consumers who they most trusted to issue mobile wallets. The question was preceded by a brief definition of a mobile wallet that was designed to be understandable to non-industry specialists (and that also fitted in the character restrictions for questions imposed by the research tool) – “A mobile wallet is an app that lets you pay online and in-store, provide ID, collect points/coupons and store data with a phone. Who do you trust most to issue mobile wallets?”

While banks came out clearly as the most trusted issuer, ahead of Google, major retailers (we gave Target and Walmart as examples, given their MCX involvement) and phone operators, an overwhelming majority of respondents at 64% said that they would never use mobile wallets. Banks gained 20% of votes, Google 10%, retailers 3% and phone operators 2%. One person wrote in Santa Claus. The overall result was considered statistically significant.

That’s pretty dispiriting news for retailers and perhaps surprising given the often stated public dislike of banks post the 2008 economic crash. However it suggests that although people may dislike banks they still trust them.

We were able to break down the responses by age, gender and income to gain some further insights. The group most likely to use wallets overall from the sample were men aged between 25-34, where only 50% said they would never use a wallet.

Other noteworthy results were that women overall were less trusting of wallets than men although only by about 7%. Men were more trusting of banks, Google and phone operators as issuers, whereas women were three times more likely to trust retailers than men.

In all age groups, the majority opinion was that they would trust no-one to issue a mobile wallet and would never use one, with banks coming in second place as most trusted of the potential issuers specified. The age group least likely to use a wallet was 65+ at 73%, then 45-54 at 72% then 55-64% at 69%. The most open minded group was 25-34 year olds at 52% then 35-44 at 56%.

18-24 year olds were surprisingly against the idea with 64%, almost identical to the overall figure, saying they would never use one, although there was a big gender split here with women notably keener than men in that age group on the idea of wallets.

The biggest fans of banks and of Google were aged between 25-44, although in no age group did Google’s trust rating go above 14%. It’s worth bearing in mind that the survey was conducted online and hence excluded the non-IT literate and so a truly representative population sample would be likely to display lower trust ratings of Google. Retailers received little trust across the board, with their highest trust rating being from over 65s at just 3%.

Middle income earners were most open to the idea of wallets and to the idea of Google as an issuer.

So what does all this mean? It’s tempting to conclude that the concept of the wallet is fatally flawed. However, you’ll notice that I’m not the Chyp wallet expert, I’m the Chyp marketing expert and I’d argue that the problem is primarily a marketing one.

The first clue may come from how difficult it was for us to define the term ‘mobile wallet’ in an easy to understand way within the space constraints allowed by the research tool. Mobile wallets aren’t an easy concept to explain to people who don’t work in the sector, and that reduces consumer awareness. Back in pre-historic times when 99.9% of people only used landlines I’m sure a similar survey would have showed little enthusiasm for mobile phones.

Furthermore, explanations can be confusing. Is the Starbucks app a mobile walletA mobile wallet app? Just a payments app? It’s not always clear whether a mobile wallet app refers to a payments app within a mobile wallet or the wallet itself. For me, the wallet is a wrapper (of varying degrees of cleverness) for a variety of apps, just as a leather wallet is what you put a card in, not the card itself. However it’s not altogether surprising that that isn’t a distinction that’s clear to the layperson.

That means that issuers need to do a better job of explaining what mobile wallets are and what benefits they bring. After all, mobile payments are by no means unknown and the Starbucks figures referenced in the link above suggest that they aren’t unpopular, so there seems no particular reason why people would object to something that makes a product they like (the Starbucks app for example) even easier and better.

Perhaps the word wallet is the problem. For a start, to some degree or another, it’s a gendered word. A lot of women don’t carry wallets (maybe that’s why electronic purses didn’t really take off outside specific markets- it could be no coincidence that a lot of Belgian men carry manbags or ‘purses’ of the leather sort anyhow). Women replying to our survey were certainly less enthusiastic than the men.

In addition, a lot of what wallets do are things that we expect phones to do with the multiple apps we use on them anyhow. Maybe the concept of a wrapper within a wrapper is a bit too meta for the general public.

Or perhaps, given that some studies show that people tend not to use smart phones for calls much anymore, we should remove the word mobile. Maybe a specialist payments device separate from the phone might appeal to some. Maybe it’s time to return to the PDA and call it a wallet. I’m not sure I know what the answer is here. All I’m saying is that consumers might well respond better to a clearer message.

One final observation on the mistrust of wallets. I paid for this survey, carried out using Google Consumer Surveys, using my credit card. When I went back to set up another survey (we repeated the exercise in the UK) I found that my payment for that went through automatically from my Google Wallet with one click. Convenient? Absolutely (assuming I wanted to use the same card, which I didn’t). Somewhat disconcerting? Yes.

 Not many people like technology with a mind of its own. Perhaps wallets sound (at least in the definition we used) just a little bit too clever?

Bear in mind though that this is just the US. As we will see in a future blog post, the picture for issuers is not quite as bleak in the UK.

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Comments: (3)

A Finextra member
A Finextra member 17 October, 2013, 05:38Be the first to give this comment the thumbs up 0 likes

Excellent post Jane, especially for the critique. Asking the right question is difficult; phrases like 'mobile wallet' mean so many different things to different folk that they can be meaningless without context.

Q: did you consider asking about value-at-risk? I wonder if convenience is the most important criterion for low values, but safety is top when it comes to the salary and savings. We perhaps don't mind/quite like Google re-using card details for basic online purchases, but doubt creeps in when the amount becomes 'significant'. (Which varies by person, obviously.) Friction isn't always a bad thing; sometimes it has intrinsic value.

Q: given your comment about the Starbucks app, did you ask whether people already had e-wallets? Maybe it's like the tap-and-go card, more people already have them than realise they do.

Nick Collin
Nick Collin - Collin Consulting Ltd - London 17 October, 2013, 12:17Be the first to give this comment the thumbs up 0 likes

Hi Jane

 

Nice post!  See my article at http://www.collinconsulting.co.uk/opinion-articles-quick-link/128-digital-wallets-making-sense-of-the-metaphor.html for similar sentiments.

 

Personally, I find that these days I tend to always use the same ecommerce sites for all my online purchases (Amazon, Eurostar, Expedia, ChemistDirect - don't ask:-)) and they all have my payment details already so why would I need a wallet anyway.  But then I'm not quite in the 25-44 age group!

 

Nick

Jane Adams
Jane Adams - Currently looking for a job - Edinburgh 24 October, 2013, 12:32Be the first to give this comment the thumbs up 0 likes

Hi Neil and Nick

Thanks for the comments. We only asked one question to keep things simple but those are both really interesting further questions, Neil, for follow ups.